Parimutuel Pools

What is Parimutuel Betting?

Parimutuel betting is a betting system where all bets go into a pool, and winners share the losing pool proportionally to their stakes.

Key Characteristics:

  • No bookmaker setting odds

  • No house edge (just a small fee)

  • Odds determined by bettors themselves

  • Self-balancing market

Origin

The term comes from French: "pari mutuel" = "mutual betting". It's commonly used in horse racing and other sports betting.

How It Works on Hivebets

Basic Flow

  1. Pool Creation

    • Two pools: YES and NO

    • Initially empty (0 BNB each)

  2. Bets Accumulate

    • Users bet on YES or NO

    • Each bet adds to respective pool

    • Pools grow over time

  3. Odds Update

    • Odds = Pool Size / Total Pool

    • Calculated in real-time

    • Displayed as percentages

  4. Resolution

    • Winning pool gets their stake back

    • Winning pool also gets the losing pool

    • Distributed proportionally

  5. Payouts

    • Your share = Your stake / Winning pool size

    • You get: Stake + (Losing pool × Your share)

    • Minus .5% platform fee

Example Walkthrough

Let's see a complete example:

Initial State

Bet 1: Shelly bets 2 BNB on YES

Bet 2: David bets 1 BNB on NO

Bet 3: Josh bets 1 BNB on YES

Bet 4: Eva bets 2 BNB on NO

Scenario A: YES Wins

Winners: Shelly (2 BNB) + Josh (1 BNB) = 3 BNB staked Losing Pool: 3 BNB (from David + Eva) Platform Fee: .5% of 3 BNB = 0.06 BNB To Distribute: 3 - 0.06 = 2.94 BNB

Shelly's Share: 2/3 of pool = 66.67% Shelly's Payout: 2 BNB (stake) + (2.94 × 0.6667) = 2 + 1.96 = 3.96 BNB Shellys Profit: 1.96 BNB

Josh's Share: 1/3 of pool = 33.33% Josh's Payout: 1 BNB (stake) + (2.94 × 0.3333) = 1 + 0.98 = 1.98 BNB Josh's Profit: 0.98 BNB

David: Loses 1 BNB Eva: Loses 2 BNB

Scenario B: NO Wins

Winners: David (1 BNB) + Eva (2 BNB) = 3 BNB staked Losing Pool: 3 BNB (from Shelly + Josh) Platform Fee: .5% of 3 BNB = 0.06 BNB To Distribute: 3 - 0.06 = 2.94 BNB

David's Share: 1/3 of pool = 33.33% David's Payout: 1 BNB (stake) + (2.94 × 0.3333) = 1 + 0.98 = 1.98 BNB David's Profit: 0.98 BNB

Eva's Share: 2/3 of pool = 66.67% Eva's Payout: 2 BNB (stake) + (2.94 × 0.6667) = 2 + 1.96 = 3.96 BNB Eva"s Profit: 1.96 BNB

Shelly: Loses 2 BNB Josh: Loses 1 BNB

Payout Formula

The Math

Simplified

Example Calculation

Odds Display

Percentage Odds

Hivebets shows odds as percentages:

This means:

  • 70% of the pool is on YES

  • 30% of the pool is on NO

What This Tells You

Higher Percentage = Lower Payout

  • If YES is 70%, YES bettors have more competition

  • Winning YES bet pays less per BNB

  • But higher "probability" of winning (according to the crowd)

Lower Percentage = Higher Payout

  • If NO is 30%, NO bettors have less competition

  • Winning NO bet pays more per BNB

  • But lower "probability" of winning (according to the crowd)

Advantages of Parimutuel

1. No House Edge

Traditional sportsbooks have a house edge (4-10%). Parimutuel has only a small admin fee (.5%).

Example:

  • Traditional book: Might offer 1.8x on both sides (11% edge)

  • Parimutuel: Depends on pools, but typically fairer

2. Market-Driven Odds

The crowd sets the odds. If everyone thinks YES, odds move to reflect that.

3. No Betting Limits (Except Max Cap)

Unlike traditional books that limit sharp bettors, anyone can bet up to the max (0.1 BNB).

4. Transparent

You see exactly how much is in each pool. No hidden algorithms.

5. Can't Be "Banned"

Traditional sportsbooks ban winners. Parimutuel doesn't care if you win.

Strategic Implications

Early Bird Advantage

Betting early when pools are small can get you better odds:

Lesson: If you have strong conviction, bet early.

Contrarian Strategy

Betting against the crowd can pay well:

Lesson: Minority side has higher upside if correct.

Hedging

You can bet on both sides:

Lesson: Hedging reduces variance.

Odds Movement Example

Watch how odds change with each bet:

Notice how odds flip as bets accumulate!

Comparison to Fixed Odds

Feature
Parimutuel (Hivebets)
Fixed Odds (Traditional)

Odds Set By

Bettors

Bookmaker

Odds Change

Yes, continuously

No (locked at bet time)

House Edge

.5% fee only

4-10% built into odds

Transparency

100% (on-chain pools)

Opaque

Max Bet

0.1 BNB

Varies (can be banned)

Fairness

Market-driven

Bookmaker sets

Common Questions

Why do odds keep changing?

Because parimutuel odds reflect the current pool ratio. Every new bet changes the pools, thus changing the odds.

Can I lock in my odds?

No. Your payout is determined by the final pool sizes at deadline, not when you bet.

Does it matter when I bet?

For the odds you get: No (determined at deadline). For your share of the pool: Yes (betting early means less dilution).

What if I bet when odds are good, then odds get worse?

Your payout is still based on final odds at deadline. Early betting doesn't lock in better odds, but it does give you a bigger share of your side's pool.

Advanced: Slippage

In parimutuel, "slippage" occurs when your own bet moves the odds:

Large bets relative to pool size cause more slippage.

Small bets barely move odds.

With 0.1 BNB max, slippage is usually minimal on Hivebets.

Next Steps

Learn more:

Prediction Markets - Market overview Oracle Resolution - How outcomes are determined Platform Fees - Detailed fee breakdown

Ready to bet? Quick Start Guide →

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